Function and Purpose of Stock Markets The stock market is one of the most important (21) ... for companies to raise money. This allows businesses to be publicly (22) or raise additional financial capital for expansion by selling shares of ownership of the company in a public market. The (23) ... that an exchange provides affords investors the ability to quickly and easily sell securities. This is an attractive feature of (24) ... in stocks. Exchanges also act as the (25) ... for each transaction, meaning that they collect and deliver the shares, and guarantee payment to the seller of a security. This eliminates the risk to an individual buyer or seller that the counterparty could (26) ... on the transaction. The smooth functioning of all these activities facilitates economic growth in that lower costs. In this way the financial system is assumed to contribute to increased prosperity. History has shown that the price of shares and other (27) ... is an important part of the dynamics of economic activity, and can influence or be an indicator of social mood. An economy where the stock market is on the rise is considered to be an up-and-coming economy. In fact, the stock market is often considered the primary indicator of a country’s economic strength and development. (28) ... share prices, for instance, tend to be associated with increased business investment and vice versa. Share prices also affect the wealth of households and their consumption. (29) central banks tend to keep an eye on the control and behavior of the stock market and, in (30) on the smooth operation of financial system functions.